Living paycheck to paycheck

Living paycheck to paycheck

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One day, my daughter asked “What does living paycheck to paycheck mean?” My wife and I talk about finances all the time. She’s an accountant by heart and I always talk about early retirement so we’re always talking about finances and our children overhear us. My response as usual is to answer her question with a question. So I asked her what she thought it meant.

I’m glad my wife and I have these open discussions because I know the children overhear us and I know they are curious about it. If parents talk about it, it has to be something important, right? And the fact that my daughter is asking what it means shows me she’s very curious about it. She told me she thought it meant getting a paycheck and living off of it. Somewhat correct.

We explained that when you receive a pay, you use that money to pay all your expenses like rent/mortgage, bills, utilities, car payment, and food. After you pay everything and if there isn’t much money left, you’re living paycheck to paycheck. You cannot afford to miss one. Now, after you pay everything and if you have leftover money which you can put towards savings or investing, then you’re not living paycheck to paycheck.

I started to ask her questions like which is better? She responded that it’s better not to live paycheck to paycheck. I then go further to say that if you do, you need to do something about it if you want to stop. There are a number of things you can do like limiting your spending, set a budget, find a new higher paying job, or build more income by working side hustles.

I get it. I’ve been there but I also did something about it. I learned new skills on my own. I started applying to higher paying jobs. I watched my spending. I stopped paying for things I didn’t need. It takes sacrifice but if this is a goal of yours, you’ll make it work.

Our kids ingest so much information so let’s give them the good stuff. It’s great to hear them asking questions about what parents talk about. I know that the earlier they’re exposed to these concepts they will be more knowledgeable for the future. Teach them early and don’t underestimate their understanding or comprehension. Keep the questions coming. If you are interested in following my journey, email subscribe to get alerts of latest posts or follow me on FacebookInstagram, and Pinterest.

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